The art of insuring fine art at universities

Five steps to protecting an institution’s treasures

Universities are home to some of the most prestigious art collections in the world, so administrators should be prepared in case an unforeseen incident occurs. 

Creating a fine art insurance program can help protect your university’s treasures for generations—and getting started is easier than you may think.

Consider these five steps:

1. Identify the property to be insured.

A broad fine art insurance policy can cover works of art, natural history collections and scientific objects, and historical and archaeological artifacts. It can also cover the technical equipment needed to run an exhibition, such as video monitors and projectors, as well as registration papers and records.

2. Identify where fine art is located.

The next step is locating all of the works of art on campus. While the art museum is a no-brainer, look carefully for works displayed in less obvious departments as well.

An insured party must maintain adequate records. Underwriters require a review of the highest-valued works from collection records housed in primary campus locations. To protect the university from risk of loss, these collections should be periodically inventoried and the records updated for accuracy.

Department heads can help in this process by identifying and providing values for their collections.

3. Assess the value of the university’s collection.

A proper appraisal helps determine appropriate insurance limits, which are typically calculated by determining the worst possible scenario, such as complete destruction of a collection.

4. Add risk control measures.

Your Probable Maximum Loss helps you evaluate a wide range of risk-control and risk-transfer measures to determine what is within your control and what can therefore be managed by appropriate procedures or investment in equipment.

Likewise, determine what is outside your control and requires you to accommodate those exposures, and put proactive and reactive measures in place.

Next, devise a checklist to include:

  • location
  • staff
  • facility
  • security
  • fire
  • environment
  • IT
  • collection

At the end of this exercise, which you should conduct annually, your institution should have greater insight into its overall risk profile and available risk transfer/loss prevention strategies.  

5. Procure fine art insurance.

Every few years, put your university’s insurance out to bid to ensure the best possible coverage at the best possible price. An insurance broker who specializes in fine art coverage can help in this process. Their specialists, working closely with your staff, can design a plan that responds to your university’s specific requirements.

Policy features to consider:

  • All-risk coverage. All possible risks of loss are covered, with the exception of standard exclusions such as wear and tear, inherent vice, war, nuclear disaster, and loss sustained during the repair, restoration or retouching process.
  • Property insured. This option should include everything listed in step 1. It should provide the broadest coverage available, and should include permanent collections and temporary loans.
  • Schedules and blankets. You have two options for the coverage amounts on the university’s fire arts. Scheduled items are insured individually on a schedule that becomes a part of the policy. A blanket approach places an insurance limit on all items at a location.
  • Worldwide territory. The policy should pay for loss or damage to fine art/objects at your permanent collection, those on loan to others and on loan to you, as well as works in storage, in transit or on tour worldwide.  

Anne Rappa is senior vice president at Huntington T. Block insurance agency. She has more than 23 years experience in the fine art insurance field.


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